Commercial agency CB Richard Ellis, in its second-quarter retail
market view, expects Melbourne's shopping centre stock to grow by
59,000 square metres this year, with most of this new floor space
reflected in the construction of regional-sized and
neighbourhood-sized centres.

This growth follows last year's unprecedented
104,000-square-metre surge in total shopping-centre floor
space.

According to CB Richard Ellis research manager Richard Jenkins,
additional retail stock includes the expansion of Maribyrnong's
Highpoint shopping centre and the redevelopment of Bayside Centre
in Frankston.

Neighbourhood centre completions for 2005 identified by the
report include Local Village in Carrum Downs and Eden Rise in
Berwick.

"We can see that 2006 is also likely to be another strong year
for neighbourhood centre development, with a further 28,000 square
metres of floor space proposed," Mr Jenkins says.

Much of this growth, he says, is on the back of the surge in
residential development on Melbourne's fringes in recent years,
with new, supermarket-based shopping centres emerging in outer
suburbs stretching from Caroline Springs in the west to Langwarrin
in the south-east.

The south-east region will be home to an additional 349,000
residents by 2031, while the western region will gain an extra
288,000 residents.

Shopping-centre development over 2005-2007 follows this pattern
of population growth, with the highest proportion of new space
located in the south-east and west regions, Mr Jenkins says. These
areas will account for just under half (46.6 per cent) of total new
space.

CB Richard Ellis forecasts in the report that demand for
shopping-centre stock will remain strong into 2006, with
shopping-centre yields continuing to tighten.

This is likely to remain the case over the next year, driven
largely by the weight of funds flowing into property, particularly
from superannuation and other investment funds, Mr Jenkins
says.

Last year it was the tightly held, sub-regional-sized and
neighbourhood-sized centres that showed the greatest firming of
yields. But this year the changes have been across all
categories.

Victorian retail investment sales totalled $300 million dollars
in the March and June 2005 quarters, and the report states that
figure was down from the $527 million recorded during the previous
six months. Total sales in the 2004-05 financial year reached $815
million, more than double that of 2003-04, when retail investment
sales totalled $377 million.